Category Archives: Insurance

Broken Windshield Lawsuit Gains Class Action Status

April 20th, 2012

An Ohio trial court certified Michael Cullen, the plaintiff in Cullen V. State Farm Automobile Insurance Company, as a representative for thousands of other Ohio citizens in a class action lawsuit.

Cullen is seeking damages from State Farm because he claims they didn’t inform him of all his options when he repaired a broken windshield on his vehicle. They covered the cost of the replacement, but Cullen says that he had another option: cash. Instead of repairing the broken windshield, State Farm could have provided him with cash equivalent to the cost of repairs. Cullen asserts that State Farm acted in bad faith by not letting him know about the cash option, while State Farm claims that no such option exists in their auto insurance policies.

As the case advances to the Ohio Supreme Court, Cullen finds himself representing 100,000 Ohio citizens with similar complaints in a class action lawsuit.

The decision drew criticism from the Washington Legal Foundation, a non-profit legal organization that filed a brief in the case. Chief counsel Richard Samp said that the plaintiff was only seeking class action status to intimidate State Farm into settling.

“There is little doubt that the only reason the plaintiffs lawyers sought class certification was to coerce the defendant into settling the case without regard to the merits of the plaintiff’s claims,” Samp said, urging the Supreme Court to decertify the case.

The brief explains that the class action status is inappropriate, and that litigation should be decided on a policyholder-by-policyholder basis.

If that many Ohio citizens are claiming that State Farm intentionally mislead them about their options, then they certainly have a case. While the plaintiffs may have different policies, the lawsuit alleges that State Farm acted in bad faith with each policyholder. In this case, a class action lawsuit would be justified.

Sarelson Law FirmMiami class action attorney

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Florida County Halts PIP Fraud

March 26th, 2012

One county in Florida has found a solution to the plague of Personal Injury Protection (PIP) insurance fraud through increased scrutiny of medical providers, causing a 62 percent decrease in staged auto accidents and questionable insurance claims.

All drivers registered in Florida are required to carry “no fault” insurance, which allows for up to $10,000 in medical care for injuries sustained in an auto accident, no matter who caused the accident.

Rates have risen 28 percent in the past six years, and the insurance industry is blaming fraud, such as staged accidents and phony and inflated medical claims, which are processed through clinics.

Last September, Hillsborough County passed its PIP Medical Providers Ordinance. The ordinance regulates questionable clinics by requiring them to register with the county and maintain consistent business practices.

In the first report published since the passage of the ordinance, the National Insurance Crime Bureau (NICB) indicates a reduction in staged auto accidents by 62 percent. According to the Hillsborough Consumer Protection Agency, nearly half of the disputed clinics have closed. Within one month of the ordinance’s passage, 79 clinics had closed, with 32 more closing soon afterward. Another 22 percent have applied for exemptions or licenses.

Questionable insurance claims have dropped dramatically, according to the NICB. In 2010, an average of 40 questionable claims were filed a month. After the ordinance went into effect, the number dropped to nearly zero.

It appears that by removing questionable clinics, the county has made it much more difficult for people to submit fraudulent claims. We hope state legislators can mimic the success of Hillsborough County.

Sarelson Law Firm – Miami class action attorneys

 

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Similarities Between Tort Reform And PIP Reform?

January 18th, 2012

Florida is experiencing a significant amount of discussion over its $10,000 in mandatory personal injury protection insurance, and the amount of fraud it is supposed to be encouraging. The current discussion over PIP limits has some similarities to the discussion of tort reform, and while we cannot say if the results of both types of reform will be the same, it is worth considering how one resembles the other.

Tort reform is an attempt to put a cap on non-economic damages in a court case. In issues like medical malpractice and product liability, a cap on damages is not as useful as is claimed by tort reform proponents. Contrary to the argument that caps will curb “frivolous” lawsuits, such caps limit the ability of wronged parties to change the behavior of the business or medical group that causes the damage.

Similarly, would lowering the limits of PIP coverage really reduce fraud and save the consumer money? Or, like with tort reform, is it really just a way for insurance companies to save money under the guise of consumer protection?

It is very important to look towards the motivations of the parties advocating change to policies designed to protect the consumer. For many groups, profit is far more important than consumer protection.

Sarelson Law Firm – Miami litigation attorneys

 

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